Georgia State Insurance Laws| 150 QUESTIONS|
WITH COMPLETE SOLUTION
Chief Executive Officer of the Office of Insurance Correct Answer: Insurance and Safety Fire
Commissioner (Commissioner)
What is the Ins. Commissioner's term of office? Correct Answer: 4 years
Chief Deputy Commissioner Correct Answer: Appointed by commissioner and assumes duties if
the commissioner is disabled or absent
Powers of Commissioner Correct Answer: Regulation
Examination of records
Investigation
Hearing and judicial review
Issuing penalties
Regulatory Authority Correct Answer: The Commissioner is given the authority to enforce the
laws related to insurance created by the state legislature. Likewise, the commissioner is granted
the authority to produce rules related to administration and enforcement of such laws.
The legality of any rule is determined by the State Attorney General.
Examination Correct Answer: When the Commissioner feels it is necessary, he may examine
insurance companies' authorized to do business in Georgia related to transactions, accounts,
records and assets and other facts relative to its business methods, management and dealings
with policyowners.
How often are companies subject to Examination Correct Answer: Every 5 years
Who is examined every 5 years Correct Answer: Domestic Insurance Companies and rating
organizations.
Who is SUBJECT to examination Correct Answer: insurance agent, subagent, broker, counselor,
adjuster or other licensed person. Any person with a contract granting a dominant right of control
of an insurance company. Those persons controlling the management of, or involved in the
creation or promotion of an insurance co. or an insurance co. holding company
Investigation Correct Answer: To gather information related to the activities of insurance
companies, agents, and others in the conduct of insurance transactions. The Commissioner may
hold hearings to discover possible violations. They are empowered to subpoena witnesses and
ask questions of those commanded to those hearings.
,Hearing and Judicial Review Correct Answer: The Commissioner may hold a hearing based
upon his belief that there is a possible violation of the Insurance Code or in response to a written
demand made by any person who feels they have been wronged under Georgia insurance law.
After a person has complained and the Commissioner feels that grounds for the hearing
exist...the hearing will be held within 30 days of the demand. The Commissioner will serve
notice of hearings by registered mail. The Commissioner
may preside or assign a designated representative as a hearing officer
Penalties Correct Answer: The Commissioner has the right to impose any penalty or remedy
provided by the law against any person who has been investigated and found responsible for a
violation without a hearing. If the wrongdoer wishes a hearing they must make such request
within 10 days of receipt of the order.
If found in violation of the law, what are the actions taken by the Commissioner's office Correct
Answer: a) to cease and desist (stop) from engaging in that act or practice.
b) to be placed on probation for a period of time not exceed 1 year for each and every violation.
c) payment of fine of not more than $1,000 for each violation, unless the violator did it
knowingly and in that case the penalty shall not be more than $5,000 for each violation.
d) a person or organization who fails to pay the penalty after it becomes final is subject to a
judgment ordered by the appropriate court upon request of the Commissioner.
If the Commissioner feels a violation warrants criminal prosecution, what happens Correct
Answer: He turns it over to the appropriate authorities
Domestic Insurer Correct Answer: insurance company formed (or chartered) under the laws
of Georgia.
Foreign Insurer Correct Answer: insurance company formed (or chartered) under the laws of
another state or government of the United States.
Alien Insurer Correct Answer: insurance company formed (or chartered) under the laws of
country other than the United States.
Stock Insurance Company Correct Answer: incorporated insurance company with capital
divided into shares and owned by its shareholders. The shareholders may or may not be
policyowners. Stock companies do not typically pay dividends to policyowners.
Mutual Insurance Company Correct Answer: incorporated insurance company without capital
stock which is owned and governed by its policyowners. Mutual companies typically do pay
dividends to policyowners.
What constitutes an insurance transaction in the state of Georgia Correct Answer: It includes
any of the following:
• Solicitation and inducement;
• Preliminary negotiations;
• Bringing about a contract of insurance; or
, • Transaction of matters subsequent to bringing about the contract and arising out of it.
**does not include the investigation and adjustment of a claim
Who is required to have a Certificate of Authority Correct Answer: Every company that acts as
an insurance company and transacts insurance business in the state of Georgia
Admitted company or authorized company Correct Answer: company granted a Certificate of
Authority
Non-admitted or unauthorized company Correct Answer: companies not granted certificates of
authority. Generally not allowed to do business in Georgia (with few exceptions)
What non-admitted companies are allowed to operate in Georgia Correct Answer: Surplus lines
transactions. Only in instances where admitted companies cannot provide coverage.
What is the exception to requiring a Certificate of Authority Correct Answer: When an ins
company is not transacting new business, but just collecting premiums and servicing policies
remaining in force in Georgia. Also, if they are in the process of investigating a claim or
adjusting a loss, it is not required
How do you qualify and hold authority to transact business in the state of ga Correct Answer:
insurer must be a stock insurer, mutual insurer, a fraternal benefit society, a hospital service
nonprofit corporation, a nonprofit medical service corporation, a farmer's mutual fire insurance
company, a Lloyd's association or reciprocal insurer.
What combinations of insurance transactions are not allowed Correct Answer: 1) A reciprocal
shall not transact life insurance.
2) A Lloyd's insurer shall not transact life insurance.
What are the rules in Ga law regarding naming Correct Answer: 1) the name used may not be
similar to that of any other authorized insurance company so as to cause confusion
2) the company asking for authorization may not use a name that would be misleading as to the
type of organization of the insurance
Discretionary refusal, revocation, or suspension of certificate (33-3-17) Correct Answer: Not
everyone is accepted (authorized). Commissioner can refuse to issue a certificate, or following a
hearing, refuse to renew, suspend or even revoke a Certificate of Authority or place them under
administrative supervision.
What would cause a Company to loose (suspend/revoke) their certificate or be put on
administrative supervision Correct Answer: Knowingly fails to comply with or violates any rule,
regulation or order of the Commissioner; or
• Is found by the Commissioner to be in unsound condition (generally we are talking about
money); or
• As a general practice compels claimants to accept less than the amount due to them; or
WITH COMPLETE SOLUTION
Chief Executive Officer of the Office of Insurance Correct Answer: Insurance and Safety Fire
Commissioner (Commissioner)
What is the Ins. Commissioner's term of office? Correct Answer: 4 years
Chief Deputy Commissioner Correct Answer: Appointed by commissioner and assumes duties if
the commissioner is disabled or absent
Powers of Commissioner Correct Answer: Regulation
Examination of records
Investigation
Hearing and judicial review
Issuing penalties
Regulatory Authority Correct Answer: The Commissioner is given the authority to enforce the
laws related to insurance created by the state legislature. Likewise, the commissioner is granted
the authority to produce rules related to administration and enforcement of such laws.
The legality of any rule is determined by the State Attorney General.
Examination Correct Answer: When the Commissioner feels it is necessary, he may examine
insurance companies' authorized to do business in Georgia related to transactions, accounts,
records and assets and other facts relative to its business methods, management and dealings
with policyowners.
How often are companies subject to Examination Correct Answer: Every 5 years
Who is examined every 5 years Correct Answer: Domestic Insurance Companies and rating
organizations.
Who is SUBJECT to examination Correct Answer: insurance agent, subagent, broker, counselor,
adjuster or other licensed person. Any person with a contract granting a dominant right of control
of an insurance company. Those persons controlling the management of, or involved in the
creation or promotion of an insurance co. or an insurance co. holding company
Investigation Correct Answer: To gather information related to the activities of insurance
companies, agents, and others in the conduct of insurance transactions. The Commissioner may
hold hearings to discover possible violations. They are empowered to subpoena witnesses and
ask questions of those commanded to those hearings.
,Hearing and Judicial Review Correct Answer: The Commissioner may hold a hearing based
upon his belief that there is a possible violation of the Insurance Code or in response to a written
demand made by any person who feels they have been wronged under Georgia insurance law.
After a person has complained and the Commissioner feels that grounds for the hearing
exist...the hearing will be held within 30 days of the demand. The Commissioner will serve
notice of hearings by registered mail. The Commissioner
may preside or assign a designated representative as a hearing officer
Penalties Correct Answer: The Commissioner has the right to impose any penalty or remedy
provided by the law against any person who has been investigated and found responsible for a
violation without a hearing. If the wrongdoer wishes a hearing they must make such request
within 10 days of receipt of the order.
If found in violation of the law, what are the actions taken by the Commissioner's office Correct
Answer: a) to cease and desist (stop) from engaging in that act or practice.
b) to be placed on probation for a period of time not exceed 1 year for each and every violation.
c) payment of fine of not more than $1,000 for each violation, unless the violator did it
knowingly and in that case the penalty shall not be more than $5,000 for each violation.
d) a person or organization who fails to pay the penalty after it becomes final is subject to a
judgment ordered by the appropriate court upon request of the Commissioner.
If the Commissioner feels a violation warrants criminal prosecution, what happens Correct
Answer: He turns it over to the appropriate authorities
Domestic Insurer Correct Answer: insurance company formed (or chartered) under the laws
of Georgia.
Foreign Insurer Correct Answer: insurance company formed (or chartered) under the laws of
another state or government of the United States.
Alien Insurer Correct Answer: insurance company formed (or chartered) under the laws of
country other than the United States.
Stock Insurance Company Correct Answer: incorporated insurance company with capital
divided into shares and owned by its shareholders. The shareholders may or may not be
policyowners. Stock companies do not typically pay dividends to policyowners.
Mutual Insurance Company Correct Answer: incorporated insurance company without capital
stock which is owned and governed by its policyowners. Mutual companies typically do pay
dividends to policyowners.
What constitutes an insurance transaction in the state of Georgia Correct Answer: It includes
any of the following:
• Solicitation and inducement;
• Preliminary negotiations;
• Bringing about a contract of insurance; or
, • Transaction of matters subsequent to bringing about the contract and arising out of it.
**does not include the investigation and adjustment of a claim
Who is required to have a Certificate of Authority Correct Answer: Every company that acts as
an insurance company and transacts insurance business in the state of Georgia
Admitted company or authorized company Correct Answer: company granted a Certificate of
Authority
Non-admitted or unauthorized company Correct Answer: companies not granted certificates of
authority. Generally not allowed to do business in Georgia (with few exceptions)
What non-admitted companies are allowed to operate in Georgia Correct Answer: Surplus lines
transactions. Only in instances where admitted companies cannot provide coverage.
What is the exception to requiring a Certificate of Authority Correct Answer: When an ins
company is not transacting new business, but just collecting premiums and servicing policies
remaining in force in Georgia. Also, if they are in the process of investigating a claim or
adjusting a loss, it is not required
How do you qualify and hold authority to transact business in the state of ga Correct Answer:
insurer must be a stock insurer, mutual insurer, a fraternal benefit society, a hospital service
nonprofit corporation, a nonprofit medical service corporation, a farmer's mutual fire insurance
company, a Lloyd's association or reciprocal insurer.
What combinations of insurance transactions are not allowed Correct Answer: 1) A reciprocal
shall not transact life insurance.
2) A Lloyd's insurer shall not transact life insurance.
What are the rules in Ga law regarding naming Correct Answer: 1) the name used may not be
similar to that of any other authorized insurance company so as to cause confusion
2) the company asking for authorization may not use a name that would be misleading as to the
type of organization of the insurance
Discretionary refusal, revocation, or suspension of certificate (33-3-17) Correct Answer: Not
everyone is accepted (authorized). Commissioner can refuse to issue a certificate, or following a
hearing, refuse to renew, suspend or even revoke a Certificate of Authority or place them under
administrative supervision.
What would cause a Company to loose (suspend/revoke) their certificate or be put on
administrative supervision Correct Answer: Knowingly fails to comply with or violates any rule,
regulation or order of the Commissioner; or
• Is found by the Commissioner to be in unsound condition (generally we are talking about
money); or
• As a general practice compels claimants to accept less than the amount due to them; or
